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SPP Data Show Rising Network Upgrade Costs, Especially for Withdrawn Projects

April 27, 2023
Average interconnection costs for withdrawn projects are 5x higher than for projects with completed studies, whose costs have largely remained stable despite dramatic growth in SPP’s queue.

Southwest Power Pool has released a brief analyzing interconnection costs in the Southwest Power Pool (SPP) territory, which finds that network upgrade costs have risen, especially among projects that withdraw from the queue. For recent projects that have completed all interconnection studies, average interconnection costs are largely unchanged from the 2000s, despite the massive growth in queue volume over the past decade.

At year-end 2022, SPP had 109 gigawatts (GW) of generation and storage capacity actively seeking grid interconnection. Capacity in SPP’s queue is almost entirely (>96%) clean energy, including solar and solar hybrids (51 GW), wind (35 GW), and standalone storage (13 GW). SPP’s queue has ballooned over the past decade: the cumulative active queue is now more than five times larger than in 2013, with 2022 additions being nearly three times the size of 2021 requests. The total rated capacity associated with interconnection requests is more than twice as large as SPP’s peak load in recent years (~51 GW). SPP first initiated interconnection process reforms in 2009, transitioning to a clustered, “first-ready, first-served” approach and increasing project deposits and readiness criteria; despite these and other reforms, some of which are ongoing, SPP’s active queue interconnection wait times have increased steadily, with the typical project taking nearly 6 years to reach commercial operations in 2022 in SPP.

With data from 845 projects, the brief’s sample covers all of the most refined cost estimates from facility studies available, as well as most system impact studies and some feasibility studies assessed between 2001 and March 2023. While the cost sample analyzed by the Berkeley Lab is sufficiently robust for detailed analysis, much data is difficult for the public to obtain. The SPP study and all underlying project-level interconnection cost data can be found at

The brief analyzes interconnection cost data for three types of projects: those that have completed all required studies, including plants now in service (“complete”); those actively working through the study process (“active”); and those that have withdrawn from the queue (“withdrawn”).

The Lab’s analysis finds that average SPP interconnection costs are stable for projects that complete all interconnection studies but have escalated for those that withdraw (Figure 1). Costs for recent complete projects (2020-2022: $57/kW) are largely unchanged from the 2000s (2002-2009: $54/kW), though they were slightly lower in the 2010s ($43/kW). Interconnection requests that withdraw from the queue saw large cost escalations in the 2010s (from $22/kW in the 2000s to $247/kW) and continued to climb in the early 2020s to $304/kW. Projects still working their way through the queue have average costs of $106/kW in 2020-2023. Average costs for withdrawn projects are now five times the costs of complete projects, likely a key driver for those withdrawals. Notably, Berkeley Lab also finds that project-specific interconnection costs in SPP differ widely due to many factors and do not have the shape of a normal distribution.

Figure 1. Interconnection Costs over Time by Cost Category and Request Status (bars show simple means, gray lines represent standard error of total costs)

Broader network upgrade costs are the primary driver of recent cost increases, especially for withdrawn projects. No costs for upgrades beyond the interconnecting substation were reported in the 2000s, but they have recently increased on average to $23/kW in the 2020s. For withdrawn projects, these network costs grew strongly in the 2010s ($180/kW) and continued to climb for some in the 2020s ($230/kW). Recent active projects had intermediate costs for network upgrades ($58/kW). A very small subset of generators seeking interconnection in SPP face lower network upgrade costs by choosing interconnection services as an energy instead of a capacity resource. However, project owners of energy resources forfeit preferential treatment during high load hours, cannot participate in SPP’s resource adequacy market, and may face increased curtailment.

Potential interconnection costs of all solar ($157/kW) and wind ($154/kW) requests have been greater than those of storage ($109/kW) and natural gas ($97/kW) projects since 2010 (Figure 2). Among completed projects in our sample, recent interconnection costs for solar ($99/kW) and natural gas ($53/kW) have increased compared to historical costs (2010s), while wind costs have decreased ($43/kW). Solar projects that ultimately withdrew had interconnection costs of $394/kW (equivalent to 25% of total project installed costs), compared to $263/kW (or 17%) for withdrawn wind applicants.

Figure 2. Interconnection Costs by Fuel Type (left) and Over Time for Complete (center-left)Active (center-right) and Withdrawn (right) Projects (bars: means, gray lines: standard error, y-axes differ by panel)

This study was funded, in part, under the U.S. Department of Energy’s Interconnection Innovation e-Xchange (i2X) (link is external), and builds on Berkeley Lab’s work tracking interconnection requests and timelines. The i2X program has recently kicked off a series of “solution e-Xchanges (link is external)” to enable stakeholder discourse on interconnection queue management, cost allocation, data transparency, and more.

The SPP brief is the fourth in a series analyzing interconnection costs in wholesale electricity markets, with prior studies analyzing MISO, PJM, and NYISO. A forthcoming study will analyze ISO New England. The SPP study and underlying project-level interconnection cost data can be found here. For questions, please contact Joachim Seel ([email protected] (link sends e-mail)) at Lawrence Berkeley National Laboratory.

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